it may be important to know if your using a .mac or aim account. if it is AIM, is it happening with the AIM app? you may want to test that out... you may also want to reinstall iChat - should be on the second panther install disk.

I had this same problem a few days ago. It turned out that i had too many people in my buddy list. I had a bunch of duplicates from doing a mass import from my address-book. So i made ichat show off line buddies, then removed my duplicates.
(my brother had 3 old screen names that he does not use any more.) Then i was able to add buddies.

I guess that you have too many people in your buddy list. AIM does "only" support about 170 entries.
Please do also a search here and look for my thread where I was bragging about having my buddylist full

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